Are MSP Partners Missing the Strategic Value of IoT?

I had the pleasure of sitting down with Barb Levisay (@blevisay), owner of Marketing for Partners to discuss the value of building an Internet of Things (IoT) practice and the value it would bring to MSP’.

Initially the article was posted on the Redmond Channel Partner website several months ago. Although some time has passed since the original post, I believe the information to be extremely valuable, actionable and timeless. Please take the time to read Barb’ article below…

As Microsoft (@Microsoft) partners look for their place in the cloud, the fanfare around Office 365 makes it seem the logical entry point. But competing in an already crowded field is risky for players late to the game. Many partners may be missing the relatively quiet call of the Internet of Things (IoT) as a strategic opportunity to stake a claim and build a practice.

Managed services providers (MSPs), in particular, have built their traditional business by providing services to monitor and optimize technical devices. Coordinating across software and hardware vendors, MSPs have a well-earned understanding of how to keep a network of disparate devices running smoothly. Since the foundation of the Azure IoT Suite (@MicrosoftIoT) is remote monitoring, the potential for MSPs to transfer skills is worth consideration.

There is no question of market opportunity; IoT is identified as a top growth area by all the big analyst firms. Given the potential of an emerging market, partners capitalizing on the opportunity could build their expertise to take a leadership position. But there is a reason that many partners are shying away from IoT.

"If you look at infrastructure partners as a class, I think they are comfortable with the three or four bottom layers of the IoT stack," said George Mellor, president and CEO KloudReadiness LLC. "Certainly, they can deal at the physical layer with physical devices. Certainly, the connectivity, they're very accustomed to and usually quite knowledgeable and skilled at. The edge computing area, where a gateway might reside, they can play there. Where they run into problems is in the platform and analytics areas."

Mellor, who advises infrastructure partners on business model and cloud transitions, sees the reluctance to go into IoT as a missed opportunity. "The analytics layer of IoT may be keeping them from entering the field. Most MSPs don't have the people on staff with data analytics skills," said Mellor. "My viewpoint is, out of the gate certainly probably for your first year in the IoT space, you certainly want to look to partner with someone who's got business intelligence [BI] or application expertise. In other words, how do we take the raw data and turn it into something our clients can act on and monetize."

Working cooperatively with a BI partner provides the opportunity to ramp up the internal skills to take a partner practice to the next level. Through Microsoft's Azure stack, Mellor has seen partners take on a broad range of service opportunities when they make the move into IoT, including:

IoT strategy consulting

IoT infrastructure

IoT data analytics

IoT security

IoT integration

IoT managed services and outsourcing

IoT application development

Once partners decide to build an IoT practice area, Mellor recommends spending the time and effort to carefully package and price solution offerings. In addition to clearly articulating the business value to clients, your package should be priced to ensure a sustainable margin. Microsoft's Cloud Solution Provider (CSP) model is designed to support just this concept of packaged service offerings.

One of the challenges with evaluating IoT as a practice area is the breadth of the field. There are so many scenarios for IoT, it's no easy task to narrow down to a specific focus. To that end, Microsoft continues to create resources to help partners build the vision and case for an IoT practice. Microsoft's Internet of Things blog includes lots of partner stories. Microsoft's recently released Data Platform & Analytics Practice Development Playbook provides guidance on the IoT partner opportunity.

For partners looking to begin or expand their cloud service models, the action isn't confined to Office 365. Look to the skill sets that have built the success of your business in the past. As an infrastructure partner experienced with connecting devices across networks, IoT may be a better fit than you imagine.